Fua v. Commission on Audit
REITERATIONFacts
The Antecedents: The Province of Siquijor, through its Sangguniang Panlalawigan, passed Resolution No. 2003-247 and Appropriation Ordinance No. 029, segregating P8,600,000.00 for the grant of an extra Christmas bonus of P20,000.00 to each of its officials and employees. This action was preceded by Resolution No. 2003-239, requesting authority from the President, who responded with a marginal note of "NO OBJECTION." Subsequently, the provincial government disbursed the bonuses. However, a post-audit by the Commission on Audit (COA) questioned the legality of these payments, citing limitations in Budget Circular No. 2003-7 regarding the amount of extra Christmas bonus and Section 325(a) of the Local Government Code concerning the 55% limitation on Personal Services expenditures. Procedural History: Following the audit observations, Atty. Roy L. Ursal, Regional Cluster Director of COA Region VII, issued Notices of Disallowance for P6,345,000.00, citing violations of Budget Circular No. 2002-A and the Personal Services expenditure limitation. The petitioner's motion for reconsideration was denied by the Regional Cluster Director. Subsequently, the petitioner appealed to the COA-Legal and Adjudication Office (COA-LAO-Local), raising issues regarding the validity of the President's "No Objection" note and compliance with the Personal Service limitation. On October 19, 2006, the COA-LAO-Local issued a Decision affirming the disallowance, which the petitioner then sought to challenge. The Petition: The petitioner, Governor Orlando A. Fua, Jr., in representation of the Provincial Government of Siquijor, filed a Petition for Certiorari under Rule 64 in relation to Rule 65 of the Rules of Court. The petition seeks to nullify the October 19, 2006 Decision of the COA-LAO-Local, alleging grave abuse of discretion. Specifically, the petitioner argues that the COA erred in disallowing the P6,345,000.00 and in disregarding the President's consent, as evidenced by the "No Objection" marginal note. The respondents, conversely, argued for the dismissal of the petition due to the petitioner's failure to exhaust administrative remedies and asserted that the President's marginal note was not an authenticated approval and was superseded by subsequent budget circulars.
Issue(s)
Whether the Commission on Audit committed grave abuse of discretion, amounting to lack or excess of jurisdiction, in ruling for the disallowance of ₱6,345,000.00. Whether the President's marginal note of "No Objection" on the letter-request of Gov. Orlando B. Fua to grant an extra Christmas bonus to the provincial government's employees should be a ground to lift the disallowance. Whether the Province, in granting the extra Christmas bonus, has complied with the 55% Personal Service limitation under Section 325 of the Local Government Code. Whether the petition for certiorari should be given due course despite the failure to exhaust administrative remedies.
Ruling
The Supreme Court dismissed the petition for lack of merit. The Court held that the petitioner failed to exhaust administrative remedies by not appealing the decision of the Director to the Commission Proper. Consequently, the disallowance as ruled by the LAO-C became final and executory and could no longer be altered or modified.
Ratio Decidendi
On the disallowance by the Commission on Audit: The Court did not directly rule on whether the Commission on Audit committed grave abuse of discretion. However, the Court implicitly acknowledged that the "No Objection" marginal note was not considered a formal approval that could override existing budget circulars and laws, especially when the petitioner failed to exhaust administrative remedies to have this contention properly addressed by the COA itself. On the President's marginal note: While not directly ruling on the merits of the bonus, the Court implicitly acknowledged that the "No Objection" marginal note was not considered a formal approval that could override existing budget circulars and laws, especially when the petitioner failed to exhaust administrative remedies to have this contention properly addressed by the COA itself. On compliance with the 55% Personal Service limitation: The Court did not directly rule on whether the Province complied with the 55% Personal Service limitation under Section 325 of the Local Government Code. On the failure to exhaust administrative remedies and the availability of certiorari: The Court reiterated the hornbook doctrine that before a party may seek the intervention of the court, they must first avail themselves of all the means afforded by administrative processes. The issues that administrative agencies are authorized to decide should not be summarily taken from them without giving them the opportunity to dispose of the same. The non-observance of this doctrine results in the petition having no cause of action, justifying its dismissal. In this case, the disallowance by the LAO-C had become final and executory due to the petitioner's failure to appeal to the Commission Proper. The Court emphasized that the special civil action for certiorari is a remedy of last resort and lies only where there is no appeal or plain, speedy, and adequate remedy in the ordinary course of law. Section 1, Rule 65 of the Rules of Court requires the petitioner to allege and prove that any other existing remedy is not speedy or adequate. Since the petitioner could have appealed the decision of the Director to the Commission Proper, he was not entitled to a writ of certiorari. The Court stressed the axiomatic principle that final and executory judgments can no longer be attacked, modified, directly or indirectly, even by the highest court. The winning party has the right to enjoy the finality of the resolution of the case. The rule on finality of decisions is not a question of technicality but of substance and merit, protecting the substantive rights of the winning party. A decision that has acquired finality becomes immutable and unalterable. The Court found that the issue presented was not purely a legal one, as it involved factual determinations regarding the authenticity and effect of the President's marginal note, which the Commission Proper, with its special knowledge and experience in audit matters, would be best suited to resolve. Therefore, the exception to the exhaustion of administrative remedies doctrine, which applies to purely legal questions, was not applicable.
Main Doctrine
The Supreme Court dismissed the petition for certiorari for failure to exhaust administrative remedies, holding that the disallowance by the Commission on Audit had become final and executory. The Court emphasized that a petition for certiorari is a remedy of last resort and is only available when there is no other plain, speedy, and adequate remedy in the ordinary course of law. Since the petitioner failed to appeal the decision of the Director to the Commission Proper, the decision of the COA-LAO-Local became final and executory and could no longer be altered or modified.